Borrowing Money Is a Better Alternative to Investing Additional Personal

question 88

Multiple Choice

Borrowing money is a better alternative to investing additional personal funds because obtaining equity investment from others:

• A) reduces the potential loss for any single investor.
• B) allows lesser debt to be included in the capital mix.
• C) increases the cost of capital for the business.
• D) increases the weighted average cost (WAC)of the business.

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Definitions:

Unauthorized Agent

An individual who acts on behalf of another party without having been given the legal or official authority to do so.

Breach Of Warranty

The violation of a promise, assertion, or guarantee made regarding the quality or nature of a product.

Transferee

A person or entity to whom rights or property is legally transferred.

Transferor

An individual or entity that transfers rights or property to another, typically as part of a sale or agreement.